The Federal Reserve just announced a plan to continue buying $89 billion in Treasury bills every month for the foreseeable future.
This program was expected to run into mid-2015, but now the Federal Reserve says they will keep doing this as long as unemployment is below 6.5% and inflation is below 2.5%.
This seems like a modest enough program. $89 billion a month isn’t enough to get on the radar in Washington where they’re discussion $1 trillion deficits and $16 trillion debts.
However, $89 billion a month equals $1,068 billion a year. Which equals $10.7 trillion over ten years, which is how Washington looks at all such stimulus programs.
The most insidious part of this is that the Federal Reserve is buying these T-bills by printing money. The Fed insists they aren’t printing money, saying “it’s all done electronically.”
My credit card pays for everything electronically, too.
Wall Street celebrated the decision. Bernanke is the new Midas. Easy money forever! Hurray!
I wonder what Washington thinks about all of this…. $1,068 billion a year!
The problem is that the Federal Reserve doesn’t work for Washington. Congress has zero control over the Federal Reserve. They are a totally independent entity run by the big banks.
What a racket.
